Interview, Part 1: Greg Baird, President And CEO, Breakthru Beverage GroupFebruary 23, 2021
As the nation’s third-ranked spirits and wine distributor, with operations in 15 North American markets and 2020 revenues of approximately $6 billion, Breakthru Beverage has been at the forefront as the industry has adapted to unprecedented changes in the marketplace over the past year.SND executive editor Daniel Marsteller checked in with Breakthru president and CEO Greg Baird to discuss current conditions within the middle tier and the business outlook for 2021.
SND: How are overall conditions in the U.S. wine and spirits business as it stands today? Where do you see particular growth opportunities this year, and what challenges most concern you from a market standpoint?
Baird: The retail business was strong in 2020, and it started out strong this year and we expect that to continue. We also expect a gradual recovery for on-premise this year, with many of the adjustments made by bars and restaurants in response to Covid-19—such as carry-out and delivery of wine, beer, and to-go cocktails—becoming permanent fixtures. The challenge, and greatest opportunity, is adapting effectively to evolving consumer behaviors. We’re seeing consumers gravitate to the story behind the label, which is in part why we’re diving deeper into that narrative through digital marketing to educate our retail and on-premise customers and provide brand education training tools for our associates.
SND: Which categories and price points are having the most success in the wine business?
Baird: U.S. wine shipments were up 1.2% in 2020 versus the year prior, and we expect to see continued growth in the premium sector as a percentage of total sales. Premiumization is happening broadly, even in retail accounts, as consumers that shifted from on-premise to off-premise continue to consume the higher-end brands they were accustomed to consuming in their favorite restaurants. RTDs as a category continue to grow, especially as more wine-based products emerge. We’re also pleasantly surprised at the strong growth in our Champagne business.
SND: What spirits categories are you most excited about, both in terms of current growth and potential for the future?
Baird: The spirits category continues to accelerate, especially fueled by at-home cocktail consumption. Ultra-premium Tequila, mezcal, Cognac, and North American whiskey remain strong despite supply constraints in some pockets. Overall, we see premiumization continuing to accelerate across categories.
SND: E-commerce is gaining in importance across the market. How is Breakthru leveraging e-commerce and digital initiatives both within its own business and in the marketplace?
Baird: We’re investing significantly against the rapidly evolving digital landscape, through technology advancements, digital partnerships, capabilities, and talent to meet the needs and expectations of our customers, as well improve consumer reach, presence, and accessibility of our suppliers’ brands. To support our customers, we’ve advanced our partnership with Provi—a marketplace-style B2B e-commerce platform—to all Breakthru markets. We’re excited to complement our Provi partnership with the launch of our proprietary B2B e-commerce platform, Breakthru Now, which we’re currently piloting in Maryland. So far, the feedback from customers in the pilot has been quite positive and we look forward to sharing the functionality and benefits as we launch Maryland statewide in early April and roll out additional markets throughout 2021. In addition, we’ve seen explosive growth this past year with business-to-consumer partners such as Drizly, Bottlecapps, Instacart, and DoorDash, along with national retailers that have an online presence. This is a newer space for distributors, but it is a direct fit with our expertise, and is here to stay.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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